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Seoul's financial regulators face criticism after cryptocurrency comment

South Korea's Financial Services Commission said that all of the nation's cryptocurrency exchanges could be closed in September if the don't cmply with law. File Photo by Maxim Shipenkov/EPA-EFE
South Korea's Financial Services Commission said that all of the nation's cryptocurrency exchanges could be closed in September if the don't cmply with law. File Photo by Maxim Shipenkov/EPA-EFE

April 26 (UPI) -- South Korea's financial authorities are coming under criticism after a top official said all cryptocurrency exchanges could be shut if they don't comply with new laws.

People Power Party's floor leader Joo Ho-young of the opposition said Monday at an "emergency" meeting that the new regulations excessively tax crypto investors and target South Koreans in their 20s and 30s, News 1 reported.

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The majority of crypto trading occurs among dealers in that age range according to CoinDesk.

Eun Sung-soo, chairman of South Korea's Financial Services Commission, said Thursday that all of the nation's cryptocurrency exchanges could be closed in September if they are not in compliance, the report said.

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"Our view of cryptocurrency is shared with the position of the governor of the Bank of Korea, who sees it as a 'virtual asset with no intrinsic value that is highly speculative,'" Eun had said, according to News 1.

Eun also said that the commission has yet to receive any Virtual Asset Service Provider applications, which is required under the amended law.

"There are an estimated 200 cryptocurrency exchanges in the country. ... But if the current situation continues, then all of them could be shut down," Eun said, according to Coin Desk.

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Joo said Monday that the government's policies are unrealistic. The opposition lawmaker also said more than 2.5 million crypto investors exist in Korea.

The government "has no clue how much national assets have flown into the cryptocurrency market," Joo said.

The lawmaker's comments come at a time of a political shift. South Koreans in their 20s and 30s reportedly turned out overwhelmingly for opposition conservatives during this month's mayoral by-elections.

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South Korea's millennials and Gen Z have said they struggle amid unemployment, underemployment and rising home prices.

The ruling Democratic Party could be seeking to win back millennials.

Ruling Party lawmaker Lee Kwang-jae said on Kim Hyun-jung's News Show on South Korea's Christian Broadcasting System radio station that younger investors should receive protection and urged transparency in crypto exchanges. Young investors should not be penalized because of other illegal actors, Lee said.

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